OCTOBER 24, 2002

Agnelli looks to France for more money

Fiat boss Gianni Agnelli has been in Paris this week amid rumours that Italy's best known industrialist is trying to find more money to keep Fiat afloat because of the losses that have been suffered by its Fiat Auto subsidiary. The issue is an important one for the Ferrari F1 team because not only is Fiat a Ferrari sponsor but also because further problems might eventually force Fiat bosses to sell more shares in Ferrari - and that could undermine the company's long-term stability.

Fiat bosses have said that there is no intention to sell more of Ferrari but times are hard and Fiat Auto's first half loss of $820m has resulted in a loss for the parent Fiat of $425m. Under Italian law Fiat Auto must now find more money. Fiat has debts of around $30bn and it is hoped that rather than selling off assets the company can lighten this load by making its automobile business profitable again. This will mean job cuts, factory closures and investment in new models but attempts to restructure the company are being blocked by the unions and by the Italian government.